HOUSING BENEFIT REFORM

The government set out proposals for housing benefit reform in October 2002 in the Department for Work and Pension's (DWP) 'Building Choice and Responsibility: a radical agenda for Housing Benefit'.

Two main changes were proposed -

1. Benefit to be paid directly to the claimant rather than the landlord

2. A flat rate local housing allowance (LHA) to be paid for similar sized properties determined for each area and based on average rents - to be paid regardless of the actual rent level. Those with rent levels below the LHA would need to 'shop around for cheaper homes'. Those with rents below the LHA would get to keep the difference.

'Pathfinder' schemes were set up in the private sector, with a view to moving the scheme at a later date into the social housing sector (for council and housing association tenants).

The proposals found more than its fare share of critics including tenants. Also Housing Associations argued that paying benefit directly to tenants would increase rent arrears; advice workers said they feared an increase in homelessness.

• LTF briefing - Housing Benefit Reform Briefing Jan '03
• LTF briefing - Housing Benefit Reform update - June '03
• LTF letter to DWP July '03
• LTF meeting with Shelter - report LTF Newsletter 2 - Summer '04 (page 4)

In January '06 the government published its welfare reform green paper 'A New Deal for Welfare: Empowering People to Work'. The green paper asked for comments on how housing benefit could be 'adapted' to better meet 'welfare reform' objectives in the social sector.

The LTF responded to consultation

• LTF response to consultation April '06

The governments response to the green paper consultation was published in June '06. Regarding the proposed introduction of the LHA in the social housing sector, government said "We recognise concerns about introducing the LHA for tenants in the social housing and we have decided not to take forward legislation to extend the LHA approach in this sector".

This is good news - at least for the time being - but continue to watch this space.

The LTF reported on this on page 8 of Newsletter 7 - Summer '06

UPDATE - Cave proposed in his Review of the Regulation of Social Housing (June '07) that the DWP extend its experiments on Local Housing Allowance, 'as the review believes that this will also have the effect of stimulating real choice for tenants'. LTF Briefing on the Cave Review on our Publications / Briefing page